Hudak's Fiscal Plan: It’s about the economy, but we’re not stupid

Ontarians are worried. The Tory leader hears it everywhere he goes across the province: Factories are closing, friends are jobless, families are nervous. Now he is tapping into that anxiety by addressing voters' biggest single concern on the doorstep.

As Hudak announced in an op-ed article for Monday's Toronto Star, he is planning a new "Million Jobs Act." If he wins the next election — expect this plan to be front and centre — it will be the law of the land.

It is good timing. And great politics.

But bad economics.

His plan for one million jobs is a neat way to win one million votes. But not if it doesn't add up.

To understand the plan, let's look at the problem: First, how many people are out of work? Too many.

Statistics Canada reported the unemployment rate jumped from 7.2 per cent to 7.9 per cent in Ontario last month. That trend is not our friend.

"There's about a million people who are out of work, when you count unemployment," Hudak told reporters Monday.

Would that mean one million new jobs for one million unemployed Ontarians over the next eight years? Full employment?

Not exactly.

In fact, Statistics Canada said Friday there were 588,000 people unemployed in the province. That's a daunting number, but it's rather less than the number Hudak claimed. He was off by about 400,000 jobs — that's plus or minus 70 per cent — from the official tally. This was no slip of the tongue. A Tory news release also notes: "More than a million Ontarians are now out of work."

Turns out the Tories used a mathematical model to factor in so-called discouraged workers who have given up looking for jobs and are not counted in the StatsCan monthly Labour Force Survey. Setting aside technical questions about how Hudak counts the unemployed, the unanswered question is how his employment promise was calculated.

Econometric analysis? Research projections?

No such thing. The best Hudak could offer was a quick math lesson for reporters: One million jobs, delivered over an eight-year span, works out to 125,000 new jobs a year. The rationale behind the estimate is that, when the Tories were in power under Mike Harris, they created jobs twice as fast as the Liberals.

Here's how they would boost employment by one million:

•Create private-sector jobs by reducing public-sector jobs. This is a variation on the Vietnam War aphorism: "We had to destroy the village to save it."

•Remove barriers to interprovincial trade and global exports. This is an aspirational perennial bandied about by all major parties for decades.

•Cut taxes for workers and employers, while speeding up deficit reduction.

The latter tax cuts are not just a Tory touchstone, but a Liberal legacy adopted over the past decade. Cutting taxes is easy enough. Raising revenues to balance the budget, as promised, becomes the hard part. The worst part, however, is that cutting corporate taxes hasn't stimulated business investment.

A 2013 report by the Task Force on Competitiveness think-tank concluded that, after a decade of tax cuts, the government got little in return. Corporate taxes were reduced to record lows, yet business hoarded so-called "lazy cash" rather than invest in machinery or R&D.

Ontario revamped its tax system into "one of the most business friendly" in the industrialized world, yet "businesses have not fully taken advantage of the many incentives that have been created to promote growth," the report noted.

That's why Hudak's promise to do more of the same will generate even less — and invites greater skepticism. So does his repeated claim that he will "increase take-home pay" while waging war on unions, by turning Ontario into a "right-to-work" province (or a "right-to-work-for-less" region, as critics suggest).

With his renewed emphasis on the economy, Hudak is certainly on to something. But voters should be on to him.

All politicians are mindful of the American campaign aphorism: "It's about the economy, stupid." In Ontario, in 2014, it's about the economy, but we're not stupid.

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tay

#2

Re: Hudak's Fiscal Plan: It’s about the economy, but we’re not stupid

Feb 16th, 2014

Even though his party's loss to the NDP in Niagara Falls, the riding next door to his own, was a HUMILIATING defeat; this makes him sound like a moron

PC Leader Tim Hudak has “big labour” in his crosshairs after losing a byelection in Niagara Falls to a union leader carrying the NDP banner.

Hudak, who hails from the Niagara Region, blasted public sector unions who turned out in force to support the NDP, and the Working Families Coalition in particular, a union-funded group that has run several ad campaigns criticizing the Ontario Tories.

Re: Hudak's Fiscal Plan: It’s about the economy, but we’re not stupid

Feb 16th, 2014

I voted for a pretty-sounding war on poverty in a common sense revolution. Next election, I voted in an advance poll just so I could vote directly against the author. Hudak promises smell like a warmed-up leftover